Get to know the 4 Types of Fintech in Indonesia

Bandung: The Financial Services Authority (OJK) revealed that financial technology is a technological innovation in the financial sector so that financial transactions can be carried out practically, easily and effectively. In practice, there are four types of fintech in Indonesia.

Head of Education and Consumer Protection Section of OJK Regional Office 2 West Java Teguh Dinurahayu explained the four types start from securities crowdfunding (scf), investment and risk management, e-wallets (electronic wallets), and fintech p2p lending (including paylater).

“Securities crowdfunding is collecting funds with a joint venture (crowdfunding) scheme to start or develop a business. Meanwhile, investment and risk management are online platforms that can be used for transactions and investments, as well as monitoring finances more easily and practically,” said Teguh, in Bandung, West Java, Tuesday, 27 June 2023.

Then for electronic wallets, he continued, are applications or features to make it easier for users to store funds to make payments. Meanwhile, continued Teguh, fintech p2p lending is a financial service provider that brings together lenders and borrowers.

On the other hand, said Teguh, there are distinct characteristics between banking and fintech. For banks, namely first, they still need physical offices in several cities to serve customers, so they require quite large operational costs. Second, the requirements for applying for a loan are strict through complete documents and a long survey, including requiring collateral.

Third, customers who need loans must come to the bank office, including in remote areas far from the office. Fourth, the loan limit is bigger because it uses collateral. Conventional banks also have a better security system. Fifth, the interest offered is quite low and transparent.

As for fintech, namely first, it does not require branch offices in several cities to serve borrowers so that operational costs can be reduced. Second, the terms are quite easy because they do not require collateral. Usually the process only takes a short time, namely a few minutes or hours.

Third, customers do not need to come to the fintech office. As long as the smartphone is connected to the internet, you can apply for a loan from anywhere. Fourth, the loan limit is limited. In addition, fintech is prone to cybercrime if it does not have a good security system. Fifth, fintech loan interest is relatively high and service fees are quite large. (Kevin Schreiber)

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(FJR)